Recognize this – New accounting rules for contracts are coming soon
Abstract: Last year, FASB issued an Accounting Standards Update intended to improve financial statement comparability. It establishes five steps to follow when determining the proper time to recognize revenue from contracts on financial statements. For construction companies that follow U.S. GAAP, this was a significant development that will likely grow in importance over the next couple of years. This article discusses why, and includes a sidebar explaining how to account for change orders under the new rules.